Malaysian Takaful Association clarifies GST impact on takaful plans

The Malaysian Takaful Association (MTA) has confirmed that the impact of GST in Malaysia on the takaful industry are on general takaful plans in the main as family takaful plans are not subject to the new tax.

According to the MTA family takaful plans are generally for protection, education, term (including mortgage) or investment-linked. Fees and charges imposed on these investment-linked certificates such as certificate fee, fund management fee, fund switching fees and so on are subject to 6% GST however. GST is also payable on the contribution paid for non-family takaful riders such as certain critical illness, medical and personal accident covers.

"As a guide, non-family takaful riders are defined as supplementary benefits or extension that provide additional cover to the basic family takaful certificates which do not cover natural death. In this regard, takaful certificate owners who have participated in the non-family takaful riders before April 1 will be required to pay GST on the applicable contribution paid for takaful coverage from April 1 onwards," the association said in a statement. "Meanwhile, general takaful certificates are subjected to GST at standard rate of 6%."

Source: MTA.

The MTA has also collated FAQs on GST from some of its members as follows:
AIA Public Takaful 
AmMetLife Takaful
Etiqa Takaful
HSBC Amanah Takaful 
Hong Leong MSIG Takaful (family takaful) 
Hong Leong MSIG Takaful (general takaful) 
Syarikat Takaful Malaysia 
Takaful Ikhlas